IMF says Brexit possibility 'very real'

The International Monetary Fund's chief economist, Maurice Obstfeld, says the possibility of Britain voting to leave the European Union at a referendum in June is "very real".

Obstfeld said Europe's refugee crisis, combined with attacks by Islamic militants, had resulted in a "rising tide of inward-looking nationalism" in the region.

"One manifestation of increased nationalism is the very real possibility that the United Kingdom exits the European Union, damaging a wide range of trade and financial relationships," he told reporters on Tuesday at the launch of the IMF's latest report on the outlook for the global economy.

Earlier in the day, the IMF said a British exit from the EU could deal a damaging blow to the fragile world economy.